Purely in terms of supply-demand, if there's more money chasing the same number of stocks, prices will rise. Vice-versa, if there is less money, prices will fall. More money has been chasing the same stocks for quite a while.
The number of investible stocks has increased but investment inflows have increased much faster. About five years ago, 40 stocks had a "mega" market capitalisation (m-cap) of Rs 25,000 crore plus and many of these were closely-held. Now, that list of mega-caps is around 80. Neglecting the inflation factor, the number of mega-caps has doubled.
However, the AUM (assets under management) of large-cap
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